One in three NHS foundation trusts are predicting a deterioration in their finances over the next year with small general hospitals and those with large private finance initiatives warning of the greatest problems, the regulator has said.

The foundation trust regulator, Monitor, said performance on waiting time targets may be affected.

The report said specifically that the four-hour waiting time in A&E and the 18-week target from GP referral to hospital treatment 'may come under increasing pressure'.

Some patient services may need to be moved, merged or reduced in order for foundation trusts to balance their books in the future, the report said.

However Government officials said waiting times were 'low and stable' with more than 90 per cent of patients treated within the four-hour A&E target and the 18-week treatment target.

NHS foundation trusts, that have greater financial freedoms and are not directly accountable to Parliament, were first created under Labour in 2004 and there are now 144 foundation trusts including hospitals, mental health trusts and ambulance trusts.

Just last month an NHS Trust grappling with two huge PFI deals became the first in the country to be put under the control of a special administrator.

South London Healthcare NHS Trust was put on the "unsustainable providers regime" and an administrator has been tasked with putting it on a viable footing.

The NHS as a whole is facing efficiency saving targets of £20bn over four years with some foundation trusts predicting they need to make annual savings of up to five per cent of their turnover.

Stephen Hay, chief operating officer at Monitor, said: "In the short term, the balance sheet is in good shape overall and trusts have planned sufficient cost savings in the year ahead.

"However, Monitor's review suggests that an increasing number of individual trusts will face financial difficulties by the end of this period, with different issues affecting different trusts.

"Our experience of reviewing these plans tells us there are indications that the sector's finances will be weaker by the end of 2015.

"Particular challenges come from the need to improve the quality of care while delivering considerable savings each year.

"Foundation trusts are planning to do this without planning to treat fewer patients or reduce the level and quality of care they provide.

"To achieve this, they will need to look at making significant changes in the way services are delivered to meet patients' changing needs."

The report said that foundation hospitals were planning to receive fewer patients once the Government reforms come into force next year and GPs begin to divert people to cheaper community services instead. However the report said that this may not be the case and hospitals planning to receive fewer patients may then find themselves in greater difficulty when numbers are not reduced.

The report said: "Our experience of reviewing trusts' plans tells us that when they are faced with demand substantially above planned levels they have been unable to deliver the additional work profitably."

"It also adds to a growing body of evidence, including from our own helpline, to indicate that this pressure is resulting in performance issues around key indicators, with waiting times rising and referral to treatment targets being missed.

"It is difficult to see how high quality care and good outcomes for patients will not continue to be put at risk as long as the Government continues to drive through £20 billion in NHS savings.”

David Stout, deputy chief executive of the NHS Confederation, which represents most NHS organisations, said that more radical action was needed to ensure healthy finances in the future.

"Pressures are continuing to grow across the NHS, with increasing numbers of organisations starting to experience significant financial pressures," he said.

"To maintain quality in light of these pressures, the report rightly highlights the need for significant changes in the way services are delivered.

"NHS leaders know the real challenge is to tackle a flat budget while managing the increased costs of treating an ageing population, advanced technology and the growing rates of lifestyle diseases such as obesity.

"And they know that doing this will require more radical action. It will require further integration of services and expanding community-based care.

"This is necessary to avoid financial pressures harming patient care, and to ensure the NHS keeps up with the needs of local populations.

"To tackle these challenges successfully, NHS leaders need to get the public on board with some very difficult decisions.

"They need to persuade people that we need to change services to improve the quality of patient care and make the most of the resources we have."

Meanwhile, one of the most senior figures in the health service has warned that the NHS reforms will lead to 'a myriad of conflicting polices' and 'a tsunami of bureaucracy'.

Mike Farrar, chief executive of the NHS Confederation, said the health service faces seven new organisations interfering with the day to day operation.

He said: “They need to minimise the burdens their policies place on the system by making it as easy as possible to comply. With so many new structures, the danger of a tsunami of new bureaucracy is obvious.

"The NHS must stay focused on patient care, not repeatedly providing information in different formats to multiple bodies.”

Health Minister Simon Burns said: "As highlighted by the Monitor review, the NHS is performing well. Furthermore, the Health and Social Care Act puts doctors and nurses in a position to respond to the challenges of the future.

"Waiting times are low and stable. The number of patients waiting longer than 18 weeks before starting treatment is over 50,000 lower than in May 2010.

"The NHS is in good financial health and at the end of 2011/12, delivered a £1.6bn surplus.

"For the small number of organisations struggling to manage their finances, the Department is continuing to work with the local NHS to ensure there are robust plans in place for financial recovery, while continuing to improve the quality of services provided to patients."